EUR/USD, GBP/USD: Tech Setups & Make Or Break Levels

Since the bottom formed at a multi-decade channel last year at 1.06/1.05 (now coming up at 1.0820/1.0780),
EUR/USD has seen a choppy consolidation with shabe p up and down
swings. This appears similar to that seen back in 2001-2002 when it made
a base for nearly three years.

Ongoing stabilization can continue in near term. A break beyond
1.1875 will mean a larger up move. 1.1875 represents 2010 low, the 23.6%
retracement of the down move from 2008 peak and last but not least the
confirmation level of a possible Double Bottom the pair has been
forming. A multi-decade channel at 1.0820/1.0782 remains key support.

Long-dated indicators (here monthly RSI) have bounced off an
equivalent decadal trend line highlighting a key support was reached in
2015.

A sub-range can be defined between 1.0820/1.0780 and 1.1460/1.1540.
1.0820/1.0780 also happens to be the multi-month graphic levels and the
76.4% retracement of the December 2015 to last May up move.

1-month ATM volatility highlights the pair is probably forming a base
as after peaking in Q2 2015 i.e. when EUR/USD hit the decadal channel
at 1.05 it has been heading downward ever since.

Short-term,
as long as 1.0820/1.0780 holds, the pair could be heading towards
September highs of 1.1330 and is likely to retest upper limit of the
consolidation zone at 1.1460/1.1540.

GBP/USD: Setup:

After evolving within a lateral range for nearly a month between
1.2090 and 1.2330 levels, GBP/USD finally broke it on the higher side.
This resulted in the confirmation of a short-term Double Bottom pattern
with a projected potential near 1.2620/1.2660, which also coincides with
the 50% retracement of the down move from last July to last October. In
the process the pair also breached the steep trend line in force since
the Brexit Vote (blue dash).

However, recent development does not lose sight of the overall weak
technical setup of GBP/USD since long-dated indicators continue to be
anchored within negative territory and daily ones will soon be
approaching multi-month resistance (daily Stochastic here).

Short-term,
so long as GBP/USD holds 1.2330 levels, another leg of up move should
take shape towards 1.2620/1.2660 and probably even towards August lows
of 1.2870.